The Society of Indian Automobile Manufacturers (SIAM) has announced the sales for August 2020 today. Prima facie, the growth seems to be back in the PV and two-wheeler segments, albeit, it is on the back of a low year-ago base.

As per the SIAM results, PVs registered a 14.16 percent growth last month with cumulative sales culminating at 215,916 units (189,129). Within PVs, all three sub-segments – passenger cars at 124,715 (109,277 / +14.13%); UVs at 81,842 units (70,837 / +15.54%) and vans at 9,359 units (9,015 / +3.82%) – registered smart upticks respectively. PV sales have reported an 18 percent month-on-month improvement (July 2020: 182,779).


On the other hand, the two-wheeler segment also reported a marginal 3 percent cumulative growth with motorcycles at 1,032,476 units (937,486 / +10.13%) and mopeds at 70,126 units (55,812 / +25.65%) showing respective positive performances, while scooters still reporting a downfall of 12.30 percent with sales closing in at 456,848 units (520,898) last month. On a month-on-month comparison basis, two-wheeler sales at 1,559,665 units in August are up 21.72 percent compared to July 2020 when they cumulatively clocked sales of 1,281,354 units. 

Clearly, it was a good monsoon which drove up demand for motorcycles from the rural clusters and now with the festive season slated to commence from the middle of September, vehicle manufacturers in both PV and two-wheeler space are seen bracing the despatches from factories to their dealers in order to build sufficient inventories to cater to the anticipated consumer demand during the auspicious period, which, however, is still expected to remain rather mellow, given the continued risk of infection from the coronavirus. 

The Indian automotive industry is enduring a rough patch, with consumer sales being devastated by the catastrophic impact of the Covid-19 pandemic on the economy. Lower incomes and cautious discretionary spends mean that new vehicle sales across segments have been witnessing a bloodbath since the onset of FY2021.

The period for the first five months between April and August 2020 of FY2021 saw passenger vehicle (PV) sales drop by 49 percent to 552,429 units (April-August 2019: 1,091,928). Two-wheelers also registered an equivalent 48.57 percent de-growth to 4,134,132 units (8,038,980) during the same period, whereas it is the three-wheelers and commercial vehicles, which have individually registered a tragic downfall of around 85 percent. 

While there has been no direct support to the industry from the government with measures meant to stimulate demand in the short-term, various factors such as the good monsoon triggering rural demand, new model launches trying to excite the buyer as well as pent-up demand being fulfilled, these are playing a critical role in keeping the sector afloat in these trying times. 

According to the newly elected SIAM president Kenichi Ayukawa, who is also the managing director of India’s largest carmaker – Maruti Suzuki India, “We are beginning to observe growth which is instilling confidence back into the industry, especially in the two-wheeler and passenger vehicle segments. Even though the industry witnessed year-on-year (YoY) growth in August 2020, it is to be recognised that the base figures in August 2019 itself were very low, as the industry had shown a de-growth of about 32 percent for PVs and 22 percent for two-wheelers in 2019 over 2018.” 

“Still, a 14 percent growth of passenger vehicles and 3 percent growth in two-wheelers in August indicates trends of recovery for the industry, though it is on the backdrop of pent-up demand and beginning of the festive season this month,” Ayukawa added.

Nonetheless, OEMs are also gearing up for a slew of new model launches and some of them look promising, for instance, the new sub-four-metre compact SUV – the Kia Sonet - which will be launched on September 18. The latest Kia will almost instantly see Toyota raging a war with the Maruti Vitara Brezza-based Urban Cruiser compact crossover, planned to be introduced in the coming weeks. 

According to Rajesh Menon, director general, SIAM, “Industry is positive that the coming festive season will pave the way for the revival of the industry.”

While SIAM continued to maintain silence over the disclosure of CV numbers which, as per the last update in June, were down by a significant 85 percent in the Q1 of FY2021 at 31,636 units (Q1 FY2020: 208,310), three-wheelers too were the ones to have reported negative growth in August with overall sales of 14,534 units (August 2019: 58,818 / -75.29%) with both passenger carriers (-84%) and goods carriers (-21%) being in the red.